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IRS Chief Named New Red Cross President

Associated Press

April 18, 2007

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NEW YORK (AP) - Trading one tough job for another, Internal Revenue Service chief Mark Everson was selected Wednesday as the new president of the American Red Cross, taking over as the charity restructures itself after sharp criticism of its response to Hurricane Katrina.

The Red Cross had been led by an interim president, Jack McGuire, since December 2005, when Marsha Evans resigned because of friction with the charity's board of governors. Her resignation coincided with congressional hearings assailing the uneven performance of the Red Cross in Katrina's aftermath.

Everson, 52, who will assume the Red Cross post on May 29, has served as IRS commissioner since May 2003, overseeing stepped-up enforcement of tax evasion. He previously was a vice president of SC International, a $2 billion food services company, and an executive with the French industrial group Pechiney.

"It is an honor and a privilege to become part of such a vital and enduring humanitarian service organization," Everson said of his new post.

The announcement came as Congress considers legislation that would dramatically overhaul the way the Red Cross governs itself. The charity's current 50-member board would be cut by more than half, and the influence of presidentially appointed overseers would be curbed under the legislation, which the Red Cross helped draft and which is expected to win approval this spring.

The reforms are intended to ease recurring clashes between board members and Red Cross management, and to address complaints that the organization was sometimes too bureaucratic and unaccountable after Katrina and the terror attacks of Sept. 11, 2001.

The senator who led the Red Cross hearings and spearheaded the reform bill, Republican Chuck Grassley of Iowa, commended the selection of Everson because of his efforts as IRS chief to better regulate America's vast nonprofit, tax-exempt sector, including charities.

"His sense of accountability, his energy, and his respect for institutions while being reform-minded are all attributes the Red Cross needs," Grassley said. "The institution gathered some moss over the years, but it's working to change. It needs a leader to guide that change."

The praise crossed party lines.

"In his nearly four years with the IRS, Mark Everson's outstanding leadership has paved the way for positive change," said Sen. Charles E. Schumer, D-N.Y. "Despite his hands being tied by limited resources, he worked hard to turn around an unwieldy bureaucracy, which is no easy task, and the IRS is better off today for his efforts."

The selection was questioned by Trent Stamp, head of a watchdog group called Charity Navigator, who has been critical of both the IRS and the Red Cross.

"This looks like a splashy move, designed to make regulators and investors happy," Stamp wrote in an online commentary. "But I'd be shocked if the volunteers and staff are celebrating right now that another high-profile outsider with no nonprofit management experience or Red Cross connection is being brought in."

Paul Light, a New York University professor who studies charities and government management, said he also was surprised by the choice because of Everson's lack of experience in the nonprofit sector.

"He does not have the set of skills that the Red Cross most needs right now, which is an understanding of the disaster response business," Light said. "He's a likable fellow, but he's going to be far over his head on this assignment."

The Red Cross was by far the biggest player in responding to Hurricane Katrina, raising $2 billion and mobilizing 235,000 volunteers, while helping hundreds of thousands of displaced people. Yet the 125-year-old charity was sharply criticized for responding too slowly in some low-income, minority areas, for over-reliance on inexperienced staff, and for reluctance to work closely with other nonprofits.

Evans' resignation in December 2005 marked the second time in three years that management-board feuding led to a leadership change after a national disaster. The previous president, Dr. Bernadette Healy, said she was forced to resign partly because of disputes with the board over whether money received after the Sept. 11 attacks should be placed in a separate fund or a general disaster fund.

Bonnie McElveen-Hunter, the chairman of the board of governors, said Everson "will bring new energy and drive terrific results" once his tenure begins.

Last year, the Red Cross aided victims of a record 72,883 disasters, mostly fires, deploying nearly 1 million volunteers and 35,000 of its own employees. Interim president Jack McGuire will stay on as its executive vice president in charge of biomedical issues.